Galaxy Launches $100M Hedge Fund as Crypto’s “Up-Only” Era Comes to an End

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• Galaxy plans a $100M hedge fund focused on both crypto and traditional financial stocks.
• The strategy aims to profit in volatile, two-way markets rather than pure upside.
• Institutional interest remains strong despite a recent pullback in crypto prices.

Galaxy Digital is preparing to launch a new hedge fund designed to profit in both rising and falling markets, signaling a strategic shift as the easy gains of the current crypto cycle begin to fade. The $100 million fund, expected to debut in the first quarter, will blend crypto token exposure with traditional financial stocks tied to digital infrastructure.

Led by veteran investor Mike Novogratz, Galaxy’s move reflects a more selective, risk-managed approach to navigating the next phase of the market.

A Fund Built for Volatility, Not Just Upside

Unlike directional crypto funds that rely on sustained price appreciation, Galaxy’s new strategy will take both long and short positions. Up to 30% of the capital will be allocated directly to crypto tokens, while the majority will be deployed into listed financial services companies influenced by blockchain adoption, regulation, and technological change.

The goal is flexibility. As Galaxy executives see it, markets are transitioning away from an “up-only” environment toward one where dispersion, volatility, and relative value matter more than broad momentum.

Confidence in Core Crypto Assets Remains

Despite the more cautious framework, Galaxy is not abandoning its bullish long-term view on digital assets. Fund lead Joe Armao has expressed continued confidence in major cryptocurrencies, including Bitcoin, Ethereum, and Solana.

Bitcoin, in particular, is seen as well-positioned if U.S. interest rates eventually decline — assuming equities and gold remain stable. That conditional outlook underscores the firm’s view that crypto is now deeply intertwined with macroeconomic forces rather than operating in isolation.

Looking Beyond Crypto-Native Companies

A key feature of the strategy is its focus on traditional financial stocks. Galaxy is closely watching payment processors, data firms, and infrastructure providers whose valuations may shift as blockchain technology, artificial intelligence, and regulatory clarity reshape the sector.

Recent sell-offs in established payments companies are being viewed as potential opportunities rather than warning signs, especially where legacy business models may be disrupted or enhanced by digital asset integration.

Backed by Institutional Capital and On-Chain Innovation

The fund has already secured $100 million in commitments from family offices, high-net-worth individuals, and select institutions, with Galaxy itself seeding the strategy. Additional capital could be accepted at launch.

Also Read: Galaxy Digital Moves 900 BTC as Firm Expands Into Altcoins and Prediction Markets

The timing aligns with Galaxy’s broader push into tokenized finance. Just last week, the firm completed its first blockchain-based collateralized loan obligation, bringing private credit activity onto public rails and reinforcing its belief in the convergence of traditional finance and crypto infrastructure.

Galaxy’s new hedge fund marks a clear pivot toward sophistication over speculation. As crypto markets mature and volatility replaces one-way price action, strategies that can navigate both sides of the trade may define the next phase of institutional participation.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.